Western UP Power Transmission Company Limited

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On 31st May 2011, Uttar Pradesh Power Transmission Corporation Limited (UPPTCL) awarded a concession of 35 years (including construction period of 3 years starting from the date of grant of Transmission License) to a consortium of Cobra Instalactiones Y Servicios S.A. (Spain-84%) & Megha Engineering and Infrastructure Limited (India-16%), for the development of the 863km 765kv/400kv single/double-circuit transmission project,in the state of Uttar Pradesh. The western region intra-state mega transmission project was aimed at system strengthening of western Uttar Pradesh transmission grids through two sections - Mainpuri-Hapur line & Mainpuri-Greater Noida line. Given the huge potential of thermal power in Central coal-rich states, power transfer to meet the long term power transfer requirement i.e. next 10-15 years. Western UP Power Transmission Company Limited (WUPPTCL) was incorporated on 11th September, 2009. UPPTCL (UP state transmission utility) was mandated to conduct the bid process for the SPV, Western UP Power Transmission Company Limited (WUPPTCL). The SPV had been formed to undertake preliminary survey work, identification of route, preparation of Survey Report, initiation of the process of land acquisition (if required), initiation of process of seeking forest clearance(if required) and to conduct the bidding process. 4 identified Long Term Transmission Customers (LTTCs) - Paschimanchal Vidyut Vitran Nigam Ltd (PVVNL), Dakshinanchal Vidyut Vitran Nigam Ltd (DVVNL), Purvanchal Vidyut Vitran Nigam Ltd (PuVVNL) and Madhyanchal Vidyut Vitran Nigam Ltd (MVVNL) - all state Discoms, entered into Transmission Service Agreement (TSA) with the successful bidder on 27th December 2011. 4 bidders - L&T Transco Pvt. Ltd., Isolux Corsan Concesiones SA, Cobra Instalactiones y Servicios SA, and Sterlite Technolgies, had shown interest in the RFQ stage, out of which only 2 (Isolux and Cobra) got qualified for the RFP stage. Cobra-MEIL Consortium won the bid by quoting the lowest levelized transmission charges of USD 190.8mn per annum (INR 8905.37mn @46.67 USD/INR). Energy Task Force (ETF) of the Govt. of UP had approved minimum benchmark price for this project at INR 8404mn. ETF had also decided that if the price bid lied within 10% above the minimum benchmark price then Bid Evaluation Committee (BEC) would to negotiate with the L1 bidder otherwise if the price bid lied beyond 10% above the minimum benchmark price then Swiss Challenge Method was to be adopted. Since L1 levelised tariff was within 10% of the benchmark levelised tariff so in view of decision taken by ETF, there was no need to invoke Swiss Challenge Method, and BEC was to negotiate with L1-bidder. BEC held the negotiations with the lowest quoted bidder, Cobra-MEIL Consortium, to arrive at a final levelised transmission charge of USD 187.5mn per annum (INR 8750 million per annum) (vide their letter dated 30-03-11). The SPV Western UP Power Transmission Company Limited was subsequently transferred to Cobra-MEIL Consortium on 22nd September 2011. The transmission license was awarded by UPERC (UP state electricity regulator) on 20th June 2012 for a period of 25 years (to be extended on request before the expiry of the license period). Adoption of Transmission Charges and grant of Transmission License by UPERC was done on 18th March 2013.The tariff adopted for the transmission system was valid for a period of 35 years. The tariff of the transmission assets beyond the period of 35 years were to be governed in accordance with the provisions of relevant CERC Regulations. The tariffs or the Transmission Service Charges (TSC) comprised of a non-escalable component and an escalable component linked to inflation index as notified by UPERC (State Regulator). The ratio of the minimum and maximum quoted annual transmission charges during the term of the TSA should not be less than 0.7 and, the quoted escalable transmission charges were not to exceed 15% of the corresponding quote